← Glossary · pricing
Commit Pricing
A contract structure where the buyer commits to a minimum spend in exchange for a discounted rate.
Commit pricing is most common in usage-based products. The buyer commits to, say, $100K of usage in year one and the vendor agrees to a per-unit rate that is, say, 30 percent below list. Overage above the commit is at the discounted rate or at list, depending on the contract. Buyers should size commits conservatively (most companies overestimate first-year usage) and negotiate roll-over of unused commits to year two.